- Jonathan Drake/Reuters
McDonald’s corporate is in hot water with franchisees who believe “the partnership is dead,” according to a new survey.
“We are doing so much, so fast and we aren’t doing any of it properly,” one franchisee wrote in response to a survey by Nomura analyst Mark Kalinowski. “Combine that with our staffing problems and we might be close to breaking McDonald’s.”
Franchisees’ complaints in the survey released Tuesday fall in two general categories: concerns regarding costly and complex changes and McDonald’s corporate executives ignoring franchisees’ concerns.
McDonald’s has made a major push over the last two years to modernize the chain. However, changes such as adding kiosks, remodeling locations, and adding more gourmet options such as espresso-based McCafe drinks to the menu add complexities and cost franchisees money.
“Concerned that many good Owner/Operators are being forced out due to the cost of Vision 2020,” one franchisee said, referring to an inactive to improve McDonald’s brand positioning. “There is a rush to get out, more and more stores are up for sale. Sad to see McDonald’s becoming something entirely different than founder Ray Kroc’s vision.”
- Hollis Johnson
“Every week there is a new initiative for the managers to focus on,” said another. “They need to slow the initiatives down and have less of them, as even our long-term employees are now quitting … McDonald’s Corporation is thinking short term, not long term.”
“Operational complexity is slowing service and will soon begin to hurt same-store sales,” said a third.
Some of the franchisees surveyed said that while they thought McDonald’s initiatives to improve business were overall positive, their relationships with corporate were deteriorating.
“Our relationship with Corporate is the worst I’ve seen in my decades as an Operator,” a franchisee said.
“The partnership is dead, as franchisees we are essentially employees with a lot of debt,” said a different franchisee.
Kalinowski interviewed 27 franchisees with 241 stores for the survey. While franchisees on average had a more positive outlook on the next six months of business compared to a survey conducted three months ago, the average estimation of franchisees’ relationship with corporate had gotten worse.
McDonald’s did not respond to Business Insider’s request for comment. In the survey, Kalinowski notes that the comments may not be representative of the US franchisee base as a whole.